Porter's Five Forces Analysis Of L Oreal

Porter’s 5 Forces analysis of L’Oreal

Company overview

The L’Oreal company we know today was created by the young French chemist, Eugene Schueller, who set up the company in1907, when he created the first hair dyes and sold them to French hairdressers. This move would lead to a focus on research and investment to enhance the beauty of consumers and towards the name L’Oreal. (L’Oreal, 2010).

During 1988-2000, the new director and later chairman in 2006, Sir Lindsay Owen-Jones led the company to being a major player in the cosmetics market. L’Oreal today has over 23 global brands and has a global presence in 130 countries. The company has set up four key divisions relating to Consumer products, Living, Active and Professional products.…show more content…
For example, if consumers don’t embrace L’Oreal’s cosmetics then they can easily find similar quality cosmetics being offered by rival companies like Revlon, etc. Revlon’s total sales for 2010 were 946.1 million euro’s or £822.8 million. (McDougall, A, 2011). Estee Lauder’s total sales in 2010 were 5613.7 million euro’s or £4851.4 million. (Estee Lauder, Annual report, 2011). Shiseido’s total sales for 2010 were 4985.8 million euro’s or £4308.7 million. (Shiseido, Annual report, 2011).

• The Power of Suppliers – This is relatively low because there are plenty of suppliers that want to work with a distinguished and reputable company such as L’Oreal. The suppliers have limited power because there are many potential suppliers that can supply L’Oreal. However, it could be argued that there are only a certain number of suppliers out there that are fully meeting the quality control standards that L’Oreal demands from their suppliers. (see…show more content…
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